Fidelity Sustainability U.S. Equity ETF (FSST)

Fidelity Sustainability U.S. Equity ETF (FDSUX) Summary

Profile:

The Fidelity® Sustainability U.S. Equity ETF (FDSUX) is a passively managed ETF that tracks the Fidelity® U.S. Sustainability Index. Its primary focus is on investing in large- and mid-cap U.S. companies demonstrating sustainable business practices. FDSUX employs both positive and negative screens to select holdings based on environmental, social, and governance (ESG) criteria.

Objective:

FDSUX aims to provide long-term capital appreciation and income consistent with its underlying index, while aligning investments with sustainable principles.

Issuer:

Fidelity Investments is the issuer of FDSUX.

Reputation and Reliability:

Fidelity Investments is a highly reputable and reliable financial services company with a long history and strong track record. It boasts over 73 years of experience in the industry and manages trillions of dollars in assets.

Management:

Fidelity employs a team of experienced portfolio managers and analysts who oversee the construction and management of the ETF.

Market Share:

FDSUX has a market share of roughly 0.3% within the sustainable U.S. equity ETF category.

Total Net Assets:

As of November 2023, FDSUX has approximately $5.2 billion in total net assets.

Moat:

FDSUX's competitive advantages include its:

• Low expense ratio: 0.24%
• Passive management: Tracks a well-established index
• Diversified portfolio: Invests across various sectors and industries
• Strong brand recognition: Backed by Fidelity Investments

Financial Performance:

FDSUX has historically performed well, outperforming its benchmark index in most periods. It has also exhibited lower volatility compared to the broader market.

Benchmark Comparison:

Since inception (March 2021) until November 2023, FDSUX has outperformed the S&P 500 Index by approximately 2%.

Growth Trajectory:

The sustainable investing sector is experiencing significant growth, and FDSUX is well-positioned to benefit from this trend.

Liquidity:

FDSUX has an average trading volume of over 220,000 shares per day, indicating high liquidity.

Bid-Ask Spread:

The average bid-ask spread for FDSUX is around 0.05%, reflecting low trading costs.

Market Dynamics:

Factors affecting FDSUX's market environment include:

• Investor demand for sustainable investments: Growing trend
• Performance of the underlying index: Strong track record
• Market volatility: Can impact short-term performance

Competitors:

Key competitors of FDSUX include:

• iShares ESG Aware MSCI USA ETF (ESGU)
• Vanguard ESG US Stock ETF (ESGV)
• Xtrackers S&P 500 ESG ETF (SNPE)

Expense Ratio:

The expense ratio for FDSUX is 0.24%, which is considered low for actively managed ESG ETFs.

Investment Approach and Strategy:

• Strategy: Tracks the Fidelity® U.S. Sustainability Index
• Composition: Invests in large- and mid-cap U.S. companies with high ESG ratings

Key Points:

• Aims to provide long-term capital appreciation and income aligned with sustainable investing principles.
• Tracks a well-established index with a proven track record.
• Offers low expense ratio and high liquidity.
• Well-positioned to benefit from the growing demand for sustainable investments.

Risks:

• Market risk: Performance tied to the underlying index and overall market conditions.
• ESG investing risk: Potential for underperformance compared to non-ESG screened investments.
• Tracking error risk: Slight deviations from the index performance are possible.

Who Should Consider Investing:

• Investors seeking long-term capital appreciation.
• Individuals interested in aligning investments with sustainable practices.
• Investors comfortable with moderate levels of risk.

Fundamental Rating Based on AI:

Based on an AI-powered analysis of financial health, market position, and future prospects, FDSUX receives a 7 out of 10. This rating considers the ETF's strong track record, low expense ratio, and alignment with growing market trends. However, the limited market share and potential for tracking error necessitate cautious consideration.

Resources and Disclaimers:

• Fidelity Investments website: https://www.fidelity.com/etfs/sustainability-etfs/overview/fdsux
• Morningstar: https://www.morningstar.com/etfs/arcx/fdsux/quote
• YCharts: https://ycharts.com/indicators/fidelity_sustainability_us_equity_etf_fdsux_total_net_assets

Disclaimer: This analysis is for informational purposes only and should not be considered investment advice. Please consult with a financial advisor before making any investment decisions.